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What is CDS and why is it an important part of Brexit?

CDS stands for the 'Customs Declaration Services' programme and is a large scale implementation currently being undertaken by HMRC to replace the CHIEF servers (these are the servers which currently process all import, export & freight declarations). The new CDS system is due to be rolled out in December 2018, but the project has just been given an unofficial amber-red status by HMRC.

The CDS program was originally signed off as part of the UCC (Union Customs Code), an EU project to modernise customs procedures across Europe, it was decided the current system (CHIEF) would not be suitable for the modernisation required.

The current system CHIEF system handles 50 million declarations per year and being that this system is currently at capacity and suffers from frequent outages, this is not regarded as a suitable customs declaration platform post-Brexit. The original CDS system was designed to process 100m fillings per year, but as a result of Brexit, HMRC are now seeking to upscale capacity to 350 million fillings.

At a meeting of the Customs, International Trade and Excise Committee on the 28th of February, Mike Gilmore from HMRC confirmed that HMRC’s Customs Declaration Services (CDS) programme was still going ahead and is due to be delivered by the end of 2018. There might be a period of parallel running with CHIEF. HMRC is confident that CDS will manage with the expected increase volume of messages when the UK exits the EU. However during a AFSS meeting on the 2nd March, Stella Jarvis from HMRC made reference to the recent Project Board meeting on the 28th February and the assessment that the project was now at an ‘Amber-Red’ status.

According to the CDS Project timelime, duel running with the CHIEF service is due to start in September 2018 and the cutover to CDS in December 2018. i2i have been attending HMRC and AFSS (Association of Freight Software Suppliers) meetings on the CDS project since its introduction, even before Brexit, the project was suffering from delays. HMRC have stated that if there are any issues, potentially declarations could be made to either the CDS or the CHIEF services, but being that CHIEF can barely cope with current demand and given HMRC's track record with ICT rollouts the industry is getting nervous.

In a submission to a government-industry joint consultative committee, the UK trade sector said: “Trade has changed significantly since the 1970s and the concept of rolling the clock back 40 years and introducing frontier clearances does not seem feasible.” UK customs checks for non-EU products are presently processed on the Customs Handling of Import and Export Freight service (CHIEF), a near-25-year-old computer system that accounts for £34bn in revenue. Britain aims to replace it with the new Customs Declaration Service (CDS) system by December 2018, just a few months before the UK’s likely departure from the EU. Industry is seriously alarmed by the administrative test of applying customs checks and separate tariffs to EU trade. Noting the danger of “major disruption at the border”, the paper to the joint committee argued it was “difficult to see” how CDS or Chief would cope by 2019 with “any substantial changes to what we do now”.

A Whitehall source told The Times: “It’s fair to say that Chief and what to do about its replacement is one of the more horrendous problems right now”.

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